Selling.net Advertising, a TSE Growth-listed company, and the web media in a legal battle.
If we only allow phone churn, the churn rate will go down.
How much is allowed to be said on social networking sites?
On October 23, Shintaro Tabata, a former executive officer of “ZOZO” and an investor, was indicted at home on charges of insulting people by calling them “incompetent” on a social networking service. The debate is endless.
In the midst of all this, one symbolic civil trial is now underway. An up-and-coming Internet advertising company listed on the Growth Market of the Tokyo Stock Exchange is engaged in a muddled legal battle with one of the media operators who has criticized the company. Unraveling the court documents obtained by Friday Digital reveals a new problem with online speech methods.
It all started with an article with the following title, published by Suan, a web media outlet that provides information on the startup industry.
(1) 90 out of 140 major D2C mail-order companies only accept phone cancellations? Behind the article was the existence of a consulting firm that propagated the idea that the churn rate would go down if only phone churn was used. (June 12, 2011)
The article pointed out the following statement made in a YouTube video (published in 2010) by Koichi Leo Kato, CEO of Selling Net Advertising, which provides consulting services to D2C (online shopping) companies (currently Selling Net Advertising Group Co. The video is as follows.
Internet users don’t like phone calls, so if you make phone calls only, the churn rate will go down.
The article raised the issue of “Selling Company” and Mr. A, one of the operators of “Suan,” which led to a legal battle between “Selling Company” and “Suan. In the process, the “Selling Company” side took a certain approach, which made the judiciary question what the rules should be in the Internet society.
What exactly is going on in the courtroom?
Selling Company” has achieved rapid growth in the field of D2C support and was listed on the Growth Market of the Tokyo Stock Exchange in October 2011. In the fiscal year ended July 2013, the company posted sales of 1.567 billion yen. CEO Kato has also become a celebrity in the industry, earning the nickname “The Magician of Response. He runs his own YouTube channel, “Selling Net Advertising Group Inc. [Koichi Leo Kato D2C Channel],” where he communicates the appeal of online advertising as an influencer.
100,000 yen a day” if not deleted.
On March 12, 2012, the company filed a lawsuit against Mr. A for defamation caused by an article in Suan. On the same day,
SUAN filed a civil lawsuit and a criminal complaint against Mr. A.” (Mr. A is listed under his own name).
(Mr. A’s real name is written). The press release also included several photographs of Mr. A’s face and the exterior of his office. His educational background and career history were also included.
The defamation lawsuit was lost by Selling Inc. in both the Tokyo District Court (December 2012) in the first trial and in the Tokyo High Court (July 2013) on appeal.
In response, Mr. A also took action. He filed a provisional injunction with the Tokyo District Court demanding the deletion of the press release, claiming that his personal and other rights had been violated.
A provisional injunction is a procedure in which the court orders a temporary halt to the infringement as a provisional measure in urgent cases where the infringement is still ongoing, because a formal trial would take time.
On November 14, 2012, the court granted the motion and issued a decision ordering Selling Inc. to delete Mr. A’s personal name, photograph, and description of his personal information.
However, “Selling Company” did not immediately respond to this provisional injunction order. Mr. A then resorted to the following measures.
He petitioned the court for “indirect compulsion,” a measure that would impose a monetary penalty on the party that did not comply with the order in order to force it to fulfill its obligations. In response to this petition, the Tokyo District Court issued the following decision on December 20, 2012, against “Selling Company
If the debtor (editor’s note: “Selling Company”) does not fulfill its obligations, the debtor (editor’s note: “Selling Company”) shall pay the creditor (editor’s note: Mr. A) money at the rate of 100,000 yen per day.
Selling Company was penalized 100,000 yen per day if it did not delete the site.
Selling Company appealed to the court against the provisional disposition and filed an objection (a temporary restraining order). However, on February 27, 2013, the court rejected Selling Inc.’s objection. In its decision, the court mentioned the motive for the release of the press release as follows.
The main purpose was to stifle speech.
The main purpose of the Debtor’s (Editor’s Note: “Selling Company”) publication of this fact (Editor’s Note: Mr. A is the operator of “Suan”) in the articles in question (Editor’s Note: Press Releases) was to give the creditor (Editor’s Note: Mr. A) the psychological burden of being disturbed by the peace of his private life by publishing the name and attributes of the operator of Suan who has been engaging in expressive activities anonymously on the Internet without his permission. It is reasonable to find that the main purpose of publishing the name and attributes of the operator of Suan on the Internet without the permission of the creditor (Editor’s note: Mr. A), who had been engaging in expressive activities anonymously, was to inflict a psychological burden on the creditor of being disturbed in his private life, and to cause his speech activities in Suan to atrophy.
In parallel with the filing of the objection, “Selling Company” deleted the description of Mr. A, which was the subject of the preliminary injunction (Selling Company claimed that it was deleted on January 6, ’25).
However, when accessing the URL of the press release that should have been ordered to be deleted, the user was automatically “redirected” (forwarded) to another website that contained the same content.
In other words, personal information that was supposed to have been deleted was still available.
According to Mr. A’s investigation, the site to which he was redirected was set up on an anonymous overseas server that hid the owner’s information. In its brief, Selling Inc. asserts the following about the site: “The website was created by the plaintiff’s representative.
The website appeared by chance in the search results when the plaintiff’s representative (Mr. Leo Koichi Kato) performed a Google search using the defendant’s name (Mr. A), and it is not known who is managing the website.
The redirect was initiated on February 5, 2013. According to the Selling Company’s brief, the redirection was stopped on March 26, 2013.
On the other hand, Mr. A’s side refutes the claim, saying that he confirmed the deactivation on July 11, 2013 on his home PC, showing a discrepancy between the two sides’ claims.
Mr. A’s side judged this action to be a “failure to comply with the obligation to delete. Based on the decision of indirect compulsion, they filed a petition with the court for an order of attachment of claims, seeking payment of a penalty of 100,000 yen per day and a total of over 17 million yen for the two petitions.
On March 18, ’25, the Fukuoka District Court granted the first motion and ordered the seizure of “Selling Company’s” bank deposits for approximately 6.3 million yen.’ On July 22, 2013, the second petition was approved, and the court ordered the seizure of an additional 11.3 million yen in bank deposits.
Selling Company” filed a “lawsuit to oppose the claim” on March 28, ’25, claiming that this seizure was unjustified (regarding the second seizure, the lawsuit was filed on August 1, ’25). Currently, the legal battle has entered a new stage, which is over the merits of the seized money.
In the second part, we will discuss the “redirection” of the sale by Selling Inc. In the second part of the article, we report on the “redirect” (transfer) made by “Selling Inc.” and the specifics of the exchange between the two sides in the judicial process.
Selling Company’s Claims of “No Redirection” and Judicial Decision
